FTSE falls for second day as Diageo leads market lower

Banks, life insurers, miners and Diageo all gave the FTSE 100 a headache yesterday, as the blue-chip index fell for a second straight day. The FTSE 100 closed 32 points lower at 6,020.

Banks wiped 22 points from the index, precious metals and mining a collective 36 points, Diageo 17 points, and life and health insurers almost 9 points.

The banks heading down were those not owned by taxpayers. HSBC was down 8p to close at 715p, while Barclays fell 3p to 313p - both down by around 1%.

The life insurers have booked decent gainst since the middle of last year, and the suggestion was that there was an element of profit taking. Legal and General led the way, falling 3p, or by 2.4%, to 119p. Prudential was down 1.9%, or by 14p, to 718p.

Diageo itself fell 58p, or by 4.6%, to £11.95, the biggest faller among the blue-chips, hit by problems in Greece, Ireland and Spain.

Sterling dipped briefly on the news that the Bank of England was leaving interest rates unchanged. But the markets were otherwise unaffected.

"This still remains something of a non-event in the economic calendar for traders – with all the focus on the release of the minutes from the meeting, expected in just under two weeks," said David Jones, chief market strategist at IG Index.

The newly-merged British Airways/Iberia combination, the mouthful otherwise known as International Consolidated Airlines Group, was suffering as a result of Air-France-KLM missing profits targets. Air France said snow, strikes and security problems were behind the downgrade, and European airline shares all nosedived as a result. ICAG was down 9p, or by 3.3%, to 251p.

Wealth manager and stockbroker Hargreaves Lansdown was a climber among the smaller caps. Strong interim results, with revenues up 30% and profits before tax up 41%, climber among the FTSE 250, pushed it up 24p to 570p.

Autonomy was one of the biggest risers on an upgrade to "buy" from "neutral" from broker UBS. Analysts Michael Briest and Chris Grundberg suggested Autonomy will close a deal before long, and thinks a deal would increase shareholder value. Whether or not others share that faith in deal-making is unclear - but the price certainly ticked up, by 35p to £16.07.

Ocado was also rising. The online retailer floated at 180p and its initial flop below its opening price prompted many to carp. There are fewer carping now, the price at yesterday's close up 10p to 285p. The company may have revealed a first profit early this month, but there are likely to still be some who see the soaring share price as a selling opportunity.